Check tubes are seen in entrance of a displayed AbbVie emblem on this illustration taken on Could 21, 2021.
Dado Ruvic | Reuters
Biotech shares rose Thursday as AbbVie introduced plans to purchase most cancers drug developer ImmunoGen for $10.1 billion.
Shares of ImmunoGen jumped greater than 80% Thursday, placing it on monitor for its highest shut since November 2000. In the meantime, AbbVie’s inventory rose greater than 2%.
ImmunoGen develops most cancers medication referred to as antibody-drug conjugates, or ADCs, that are designed to immediately kill most cancers cells and spare wholesome ones. Shares of different biotech corporations growing ADCs, that are among the many hottest areas within the pharmaceutical trade, jumped on the information of the buyout.
That features Sutro Biopharma‘s inventory, which spiked about 16% Thursday and shares of Mersana Therapeutics, which rose almost 17%. Shares of ADC Therapeutics additionally popped about 15% Thursday.
The SPDR S&P Biotech ETF, which focuses on small and midsize biotech corporations, rose 3% Thursday. The Nasdaq Biotechnology Index superior greater than 1%.
Underneath the phrases of the deal, AbbVie can pay $31.26 a share in money for ImmunoGen, a roughly 95% premium to Wednesday’s closing worth. AbbVie mentioned it expects to finish the acquisition, which goals to strengthen its oncology pipeline, in the midst of 2024.
Guggenheim analyst Michael Schmidt mentioned the value of the deal displays the “increasing interest we have seen from large biopharma companies wanting to increase their exposure” in ADCs, which he referred to as an “attractive area.”
For instance, Pfizer agreed to accumulate Seagen, a pioneer in ADCs, for $43 billion earlier this yr. Merck and Daiichi Sankyo additionally lately agreed to collectively develop and commercialize three potential ADCs in a deal price as much as $22 billion.
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